Content originally published by BizWest on January 22, 2016.
U.S. Rep. Ed Perlmutter, D-Colo., has the right idea. His Marijuana Businesses Access to Banking Act, last introduced in April, would address a growing problem for the nation’s marijuana businesses: access to banking services for what remains illegal under federal law.
Congressional action is the only solution, and we hope Perlmutter reintroduces his bill in 2016.
A recent federal court ruling dismissed a lawsuit over establishment of a credit union for the marijuana industry, effectively preventing the organization from accessing the nation’s banking system.
The Fourth Corner Credit Union was chartered by the state of Colorado in November 2014, with the goal of helping medical and recreational marijuana businesses transact business. But the Federal Reserve denied the credit union an account, and the National Credit Union Administration declined to provide it with deposit insurance, both citing federal law.
The Fourth Corner sued the Federal Reserve and the NCUA, but U.S. District Court Judge R. Brooke Jackson dismissed the lawsuit because marijuana remains illegal under the U.S. Controlled Substances Act.
Although the U.S. Treasury Department’s Financial Crimes Enforcement Network in 2014 provided some guidance for how banks could serve the marijuana industry, the rules remain cumbersome, and most banks have opted against serving marijuana businesses, fearful of getting crosswise with the feds.
The result is an untenable situation, with large sums of cash creating a danger for employees and customers of the cannabis industry.
“First and foremost, this is an issue of public safety,” Perlmutter said in a press release announcing his 2015 bill. “Not only are the proprietors at risk, but the employees and customers are also at risk of serious and violent crimes. It is estimated that 40 percent of the marijuana-related businesses in Colorado are unbanked. This means hundreds of millions of dollars in cash are moving around the streets of Colorado.”
Perlmutter noted that, already, 23 states and the District of Columbia allow medical marijuana. Additionally, Colorado and three other states have legalized it for recreational use. Five other states are expected to pass recreational marijuana in the coming year.
“It is coming to a state near you soon,” Perlmutter said.
Perlmutter’s 2015 bill languished in committee, but as more states legalize marijuana, support is likely to grow for easing federal restrictions. With what will soon be a majority of the states legalizing marijuana, isn’t it time for Congress to act?